This report introduces cryptocurrencies and other types of crypto-assets and discusses some recent activities by accounting standard setters in relation to crypto-assets.
Crypto-assets experienced a breakout year in 2017. Cryptocurrencies, such as bitcoin and ether, have seen their prices surge as the public’s awareness has increased, and financial market participants have thus increasingly turned their attention to the phenomenon. Simultaneously, a wave of new crypto-asset issuance has been sweeping the start-up fundraising world, sparking the interest of regulators in the process.
Accountants have thus far been notable by their relative absence from that narrative. Perhaps, most notable is the fact that the Australian Accounting Standards Board (AASB) has submitted a discussion paper on “digital currencies” to the International Accounting Standards Board (IASB), and the Accounting Standards Board of Japan (ASBJ) has issued an exposure draft for public comment on accounting for “virtual currencies”. In addition, the IASB discussed certain features of transactions involving digital currencies during its meeting in January 2018, and will discuss in future whether to commence a research project in this area.
This also highlights the lack of a standardised crypto-asset taxonomy, which makes it difficult to determine the applicability of standard setters’ published perspectives. Furthermore, due to the diversity and pace of innovation associated with crypto-assets, the facts and circumstances of each individual case will differ, making it difficult to draw general conclusions on the accounting treatment. Despite the market’s increasing need for accounting guidance, there have been no formal pronouncements on this topic to date.
